FTB, making an offer on new build tomorrow - advice needed please!

Kez100

Thanks Pete.

You have nothing for house insurance, buildings and contents

You have nothing for life insurance to pay off the mortgage if either of you were to die.

You need to be careful about when your mortgage payment falls due as I can remember having to pay more for my frst repayment when I moved in and being quite surprised. It's such a long time ago now I can't recall what happened but I know we had to take out some savings to pay it. Hopefully someone on here will know what happened to us and explain it better.

You need to determine the actual council tax as it should be possible to do and ask others with newbuild 2 beds for gas and electric. Also find out water if you can as it is terribly expensive in some places. See if your estimates are fair because you don't have the buffer for error. Utilities are going mental so build in a buffer for those.

Food, as you say. Car repairs, services and MOTs. Bits and pieces for the house. Clothes, personal care and gifts.

Just off to check out my bank statements for other missing things!....

Right, done that....

We also choose to pay pension, sky, contract to cover our central heating maintenance and union fees. We also have an annual holiday.

pete96

Well contrulations everyone, you all deserve a pat on the back (and the rest i guess)... you have successfully made me and my partner come around!!! Before i wrote all these calcs down, we probably had made a few too many assumptions i guess, which resulted in us feeling the 'it'l be ok' feeling.

As i've already said many times, all the advise has made sense. Now it has really sunk in, to both of us.

Regarding the offer, if in the end they come back and accept £150K, we may re-assess the situation again. Since if we could get the payments on the house down to £600, things would look a little different. And eventhen i'd stil appreciate i wouldstill be a HUGE risk... i know!

Thanks all! I actually feel happier now

gggareth

Good decision...

Save up for 6 months,review the housing situation..
If you do that every 6 months you will see when a house becomes affordable..

briona

pete96 wrote: »

we have a joint income of around £37K.
A mortgage of £134K equates to monthly payments in the region of £750/month + £50-80 for the equity loan.... so yes this is afordable for us.

pete96 wrote: »

Me - £1354 take home
Partner - £12,000pa before tax (dont know take home as never seen a pay slip) PLUS any commision (which varies from about £100 for a bad month to anything upto £1K in good months - probably averages out at about £250 though)

Er… what happened to your partner’s income?! Unless that was a mistype, at the beginning of the thread, she had an income of 17K, now it’s 12K?! And I believe you said yours was 20K, which would bring in £1,300pm not £1,354. An income of 12K is £840pm after tax, and even assuming an extra £250 as commission EVERY month that would still only give her £1,090pm.

As others have said you haven’t accounted for food, Sky TV or similar (assuming you wanted it), socialising, clothes, haircuts, newspapers, magazines (my magazine habit added up to a HUGE sum each year!), holidays, furniture, crockery and other household essentials, appliances, Christmas, birthdays, road tax, increases in bills (which is a very real threat), debt repayment (assuming you have or will have any credit cards)… need I say more? And given that you only managed to save £1,000 between you so far, I very much doubt that you put enough away in the future to cover all these eventualities.

And the biggest issue of all is once your fixed rate on the mortgage expires, will you still be able afford to service the debt?!

************

EDIT: I took too long to type my reply – just seen you've changed your mind! Good call!

Kez100

I think this exercise has perfect timing for you. You understand far more about home ownership, the costs and the possible risks than you did this time last week and far more about budgeting and the need to budget. You and your partner have started to look forward to your future beyond 'your student days' and the cheap but 'cramped room'. Whatever you don't need to spend now you can squirrel away and build a decent deposit and money to furnish your first home together. Hopefully the car loans will be out of the way soon too (I am assuming that is what they are).

It might be worthwhile now putting away in savings the money you thought you would be spending on the mortgage and utilities etc (less what you pay now for your room, of course). This would give you a feel for how far your incomes go.

As time goes on you can regularly reassess your situation armed with a lot more understanding and hopefully a good deposit and savings to pay towards fees so you aren't forced to buy a new build.

BettiePage

Kez100 wrote: »

I think this exercise has perfect timing for you. You understand far more about home ownership, the costs and the possible risks than you did this time last week and far more about budgeting and the need to budget. You and your partner have started to look forward to your future beyond 'your student days' and the cheap but 'cramped room'. Whatever you don't need to spend now you can squirrel away and build a decent deposit and money to furnish your first home together. Hopefully the car loans will be out of the way soon too (I am assuming that is what they are).

It might be worthwhile now putting away in savings the money you thought you would be spending on the mortgage and utilities etc (less what you pay now for your room, of course). This would give you a feel for how far your incomes go.

As time goes on you can regularly reassess your situation armed with a lot more understanding and hopefully a good deposit and savings to pay towards fees so you aren't forced to buy a new build.

What they said. :T

I'm glad you started to listen to the advice being given Pete.

pete96

Thanks all! I certainly have learned alot, as i said it feels like ive aged 10 years in 2 days, and im so greatful for it! Sorry to anyone who i may have been a little rude or ignorant towards, and that fact you all have spent so much time helping me out goes to show what good people you all are.

The stem of my problems (wishing the impossible/rediculous) was probably down to the fact me and my partner have been house sitting for my brother while they've been in Texas visiting the rents. Two weeks here, in a cute 2 bed house really got us craving for the situation to be perminant!

Briona, that descrepency you see on income was because i never said my salery was 20K... i said 20K+

We've decided now to double our savings into our ISAs, maybe even triple if we really try. So if you all dont mind, i'll be coming back to this thread June time (finished uni with no worries - touch wood) with savings of 5K minimum, asking for more advice on our situation then, and help to assess our oppertunities of house buying then!!

Thanks again!

Incisor

pete96 wrote: »

... We've decided now to double our savings into our ISAs, maybe even triple if we really try. So if you all dont mind, i'll be coming back to this thread June time (finished uni with no worries - touch wood) with savings of 5K minimum, asking for more advice on our situation then, and help to assess our oppertunities of house buying then!!

You'll be very welcome. Although I doubt you will be ready to go ahead for a while after that, as you begin to get your savings up and things move on, the sums will start looking more in your favour and you will have more of a feel for when you will be ready and what you will be able to afford.

Good luck with your studies.

Kez100

Good luck with your final year at Uni!

I still remember, with fondness, visiting my boyfriend (now husband of 16 years) in his pokey little flat where water ran down the walls when upstairs had a shower! These experiences help to make us what we are and we are better for it. What is important is that you are together, it doesn't matter where.

Let's hope the relatives love Texas and go back for another holiday real soon!

hethmar

Pete (and gf) what a brilliant couple to actually listen, evaluate and then come back to say you had changed your mind.

Im sure you have your heads screwed on and you will see that it would be sensible to get some solid savings behind you. Keep watching the house market and Im sure you will get your own place one day - at the right time and price